Track the Money: Creative

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By M. Wiley

Creative Technology Ltd., known to all of you as simple "Creative", today announced financial results for the fourth quarter and fiscal year 2003, ended June 30, 2003. All these here financial results are stated in U.S. dollars.

Sales for the fourth quarter were $149.6 million, in line with the Company's guidance. This compares to sales of $182.6 million for the same quarter of last year. Creative achieved net income for the fourth quarter of $4.6 million, and earnings per share met the Company's expectations, coming in at $0.06. This compares to last year's fourth quarter net loss of $48.4 million and loss per share of $0.65. Comparative results for the fourth quarter of fiscal year 2002 include a one-time charge related to the acquisition of 3Dlabs, Inc. of $26 million for in-process technology, and also include an investment loss of $29.8 million.

Sales for the full fiscal year 2003 were $701.8 million, compared to $805.9 million for the same period last year. Net income for fiscal year 2003 was $23.4 million or $0.29 per share, compared to a net loss of $19.7 million or a loss of $0.27 per share for the previous fiscal year. Net income for fiscal year 2003 includes net investment losses of $6.0 million or $0.07 per share. Net income for fiscal year 2002 includes a one-time charge related to the acquisition of 3Dlabs, Inc. of $26 million for in-process technology, and also includes net investment losses of $45.4 million.

"This has been an operationally solid and profitable year for Creative," said Craig McHugh, president of Creative Labs, Inc. "In the fourth quarter, we again achieved our expectations for revenue, gross margin, operating expenses and earnings per share, as we did each quarter during fiscal year 2003. During the quarter, we continued to dedicate significant development resources toward increasing the breadth of our product lines and moving more of our product offerings outside the PC box where we can offer great visual ID and appeal to an even broader base of potential customers."

"Between now and the end of the year, we plan to launch over 90 products, the most in our history," said Sim Wong Hoo, chairman and CEO of Creative Technology Ltd. "The introductions will come across all of our product categories and will extend our leadership position in Personal Digital Entertainment. We have just announced the first of these in our NOMAD MP3 player line: the NOMAD Jukebox Zen NX and the NOMAD MuVo NX. The Nomad Jukebox Zen NX is the slimmest, lightest NOMAD Jukebox ever -- at a price 40% less than the highest-capacity Apple iPod. And with the Nomad MuVo NX, we have taken our award-winning, revolutionary MP3 player and USB storage device all-in-one, added an LCD display and a microphone, and expanded the capacity to offer a 256 MB model. We have also just launched two beautiful Creative I-Trigue speaker systems with killer looks and exceptional performance. These are truly incredible speakers, featuring Lateral Firing Transducers for a wider soundstage and richer listening experience. They also feature our patent pending M-Port technology, which provides direct connection from compatible NOMAD MuVo players to the I-Trigue volume control."